Medical device maker Medtronic, Inc. recently settled a case under the False Claims Act alleging unlawful monetary kickbacks for physicians willing to implant its products in their cardiac patients. Unlawful kickback schemes are one of the most common scenarios triggering liability under the FCA and the federal government has worked tirelessly to combat this “taint” on patient advocacy. Under the FCA, anyone with firsthand knowledge of kickback schemes or similar fraud can come forward with an individual lawsuit – after which the U.S. government may opt to intervene. A successful whistleblower can recover up to 30 percent of the settlement or recovery recouped by the U.S. government.

Details of Case Against Medtronic

Medtronic is a cardiac medical device manufacturer with products ranging from pacemakers to diagnostic imaging tools. According to the allegations, Medtronic offered cash, consulting jobs, cards, vacations, recreation, sports tickets, and entertainment to physicians who were willing to implant their devices. These devices were often used to treat serious, life-threatening heart conditions, including those suffering from bradycardia, tachyarrhythmia, inexplicable fainting, and various other cardiac issues.

The products subject to the kickback agreement included those in Medtronic’s “Cardiac Rhythm Disease Management” sector, such as a pacemaker, implantable defibrillators, monitoring devices, and leads designed to connect the devices to the patient’s heart.

The arrangement between Medtronic and the doctors involved created an illegal, undisclosed financial relationship between the two parties that could possibly give rise to doctors providing unsound medical advice to patients. The federal anti-kickback statute in combination with the FCA is designed to ensure patient advice is given in light of the patient’s best interests, and not an underlying hope for financial gain.

The lawsuit was filed in the U.S. District Court for the Eastern District of California. The final settlement amount, just shy of $10 million, includes an undisclosed amount for the whistleblower willing to come forward.

A History of False Claims

This case is hardly Medtronic’s first go-round with the False Claims Act as it has settled several other FCA allegations in the past few years. In 2008, the corporation settled with the Department of Justice for a staggering $75 million amid allegations it offered kickbacks to doctors willing to perform costly spinal surgeries for patients who only needed less-expensive outpatient care. In 2011, Medtronic paid another $23.5 million to settle claims it engaged in a kickback arrangement whereby doctors were paid $1,000-$2,000 per patient implanted with its pacemaker devices. The whistleblower in the 2011 case recovered $3.96 million.

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